Newsflash–Treasury Secretary Mnuchin spends 50% or more of his time on national security issues/economic sanctions by Tim McTaggart
Interview with U.S. Dept of Treasury General Counsel, Brent McIntosh
Last month, I interviewed U.S. Department of Treasury General Counsel, Brent McIntosh. He served as the lunchtime keynote speaker at the Women in Housing and Finance Annual Symposium in Washington, D.C. There was no recorded link made for the event but I would be happy to chat offline about the interview with McIntosh.
During the interview, McIntosh made the point that Treasury Secretary Mnuchin previously stated (in 2017) that he spends upwards of 50% or more of his time addressing national security issues. That was news to those in attendance, including those who follow the sanctions rules closely.
McIntosh additionally drew attention to the increasingly sophisticated nature of the Treasury Department's Office of Foreign Asset Control ("OFAC") sanctions now imposed. The sanctions no longer tend to be "one size fits all" prohibitions against conducting transactions with one country. Instead, the sanctions now target specific actors within a country or importantly, enterprises which can span several countries. Simultaneously, exceptions for humanitarian aid and other licensed exceptions can be allowed. That complexity makes the compliance effort more difficult for all. Plus, the sanctioned nation/actor most likely will also include relevant corporate subsidiaries and affiliates which can quickly proliferate into a complex organizational structure involving multiple entities covered by the sanctions.
McIntosh also noted the success of the recent economic sanctions. That would strongly suggest the continued use of the existing OFAC sanctions and possibly expansions to new countries and other situations over time.
New OFAC Compliance Framework
On May 2, 2019, Treasury issued a press release with a compliance framework to address OFAC economics sanctions and related national security issues. https://www.treasury.gov/resource-center/sanctions/Documents/framework_ofac_cc.pdf
I would be happy to chat offline about the Treasury guidance.
Suffice to say that the OFAC framework lays out a strong compliance structure that can be adopted by financial institution and other large corporate entities impacted by the economic sanctions in force. Interestingly, at the end of the document, the Treasury Department provides "root causes" to study in connection with efforts to assure compliance with OFAC rules and precedent. That also is a nice road map for experienced defense counsel to use in a potential civil money penalty review by OFAC. The road map can be used both to anticipate what issues will be of greatest concern to OFAC but also to present defenses because it is impossible to have "perfect compliance" in this area even with a strong commitment to robust due diligence and a well supported compliance program.
Contact info
Tim McTaggart, 202-412-6610, May 24, 2019.